EXHIBIT 10.2


 


EXECUTION COPY

COMMON STOCK ONLY


 




 





 


SECURITIES
PURCHASE AGREEMENT


 


dated as of April 7, 2008


 


between


 


WASHINGTON
MUTUAL, INC.


 


and


 


THE
PURCHASERS NAMED HEREIN


 




 





 

















 


Table of Contents


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  
	
  Purchase; Closings

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Purchase

  	
  1

  
	
  1.2

  	
  Closing

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
  Representations and Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Disclosure

  	
  2

  
	
  2.2

  	
  Representations
  and Warranties of the Company

  	
  3

  
	
  2.3

  	
  Representations
  and Warranties of the Purchaser

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
  Additional Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Other
  Actions

  	
  10

  
	
  3.2

  	
  Exchange
  Listing

  	
  11

  
	
  3.3

  	
  Legend

  	
  11

  
	
  3.4

  	
  Indemnity

  	
  12

  
	
  3.5

  	
  Registration
  Rights

  	
  13

  
	
  ARTICLE IV

  	
   

  
	
  Termination

  	
   

  
	
  4.1

  	
  Termination

  	
  21

  
	
  4.2

  	
  Effects of
  Termination

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Survival

  	
  21

  
	
  5.2

  	
  Standard

  	
  21

  
	
  5.3

  	
  Amendment

  	
  22

  
	
  5.4

  	
  Waivers

  	
  22

  
	
  5.5

  	
  Counterparts
  and Facsimile

  	
  22

  
	
  5.6

  	
  Governing
  Law

  	
  22

  
	
  5.7

  	
  WAIVER
  OF JURY TRIAL

  	
  22

  
	
  5.8

  	
  Notices

  	
  22

  
	
  5.9

  	
  Entire
  Agreement, Etc

  	
  23

  
	
  5.10

  	
  Other
  Definitions

  	
  23

  
	
  5.11

  	
  Captions

  	
  24

  
	
  5.12

  	
  Severability

  	
  24

  
	
  5.13

  	
  No Third
  Party Beneficiaries

  	
  24

  



 

















 


	
  5.14

  	
  Time of
  Essence

  	
  24

  
	
  5.15

  	
  Specific
  Performance

  	
  24

  



 

















 


INDEX OF
DEFINED TERMS


 


	
  Term

  	
   

  	
  Location of

  Definition

  
	
  Affiliate

  	
   

  	
  5.10(a)

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Beneficially
  Own

  	
   

  	
  3.1(c)

  
	
  Beneficial
  Owner

  	
   

  	
  3.1(c)

  
	
  Benefit Plan

  	
   

  	
  2.3(e)(4)

  
	
  Board of Directors

  	
   

  	
  2.2(c)(1)

  
	
  business day

  	
   

  	
  5.10(e)

  
	
  Capitalization
  Date

  	
   

  	
  2.2(b)

  
	
  Closing

  	
   

  	
  1.2(a)

  
	
  Closing Date

  	
   

  	
  1.2(a)

  
	
  Common Stock

  	
   

  	
  Recitals

  
	
  Company

  	
   

  	
  Preamble

  
	
  Company
  Financial Statements

  	
   

  	
  2.2(f)

  
	
  Company
  Preferred Stock

  	
   

  	
  2.2(b)

  
	
  Company SEC
  Reports

  	
   

  	
  2.2(g)

  
	
  Company
  Subsidiary

  	
   

  	
  2.2(c)

  
	
  Convertible
  Preferred Stock

  	
   

  	
  3.1(c)

  
	
  Disclosure
  Package

  	
   

  	
  3.5(a)(1)

  
	
  Disclosure
  Schedule

  	
   

  	
  2.1(a)

  
	
  ERISA

  	
   

  	
  2.3(e)(5)

  
	
  Exchange Act

  	
   

  	
  2.2(g)

  
	
  Free Writing
  Prospectus

  	
   

  	
  3.5(g)(2)

  
	
  Governmental
  Entities

  	
   

  	
  2.2(d)(1)

  
	
  HOLA

  	
   

  	
  2.2(a)

  
	
  Holder

  	
   

  	
  3.5(a)(3)

  
	
  Holder Free
  Writing Prospectus

  	
   

  	
  3.5(a)(4)

  
	
  Holders’
  Counsel

  	
   

  	
  3.5(d)(2)

  
	
  Indemnified
  Party

  	
   

  	
  3.4(b)

  
	
  indemnified
  person

  	
   

  	
  3.5(g)(3)

  
	
  indemnifying
  person

  	
   

  	
  3.5(g)(3)

  
	
  Liabilities

  	
   

  	
  3.5(g)(1)

  
	
  Liens

  	
   

  	
  2.2(c)

  
	
  Losses

  	
   

  	
  3.4(a)

  
	
  Material
  Adverse Effect

  	
   

  	
  2.1(b)

  
	
  person

  	
   

  	
  5.10(f)

  
	
  Previously
  Disclosed

  	
   

  	
  2.1(c)

  
	
  Purchasers

  	
   

  	
  Preamble

  
	
  QIB

  	
   

  	
  2.3(e)(1)

  
	
  Registrable
  Securities

  	
   

  	
  3.5(a)(5)

  
	
  Registration
  Expenses

  	
   

  	
  3.5(d)(1)

  
	
  SEC

  	
   

  	
  2.1(c)

  
	
  Shareholder
  Proposals

  	
   

  	
  3.1(c)

  
	
  Shares

  	
   

  	
  Recitals

  



 

















 


	
  Term

  	
   

  	
  Location of

  Definition

  
	
  Securities
  Act

  	
   

  	
  2.2(g)(1)

  
	
  Selling
  Holders

  	
   

  	
  3.5(a)(6)

  
	
  Series R
  Preferred Stock

  	
   

  	
  2.2(b)

  
	
  Shelf Period

  	
   

  	
  3.5(b)(1)

  
	
  Shelf
  Registration

  	
   

  	
  3.5(b)(1)

  
	
  Shelf
  Registration Statement

  	
   

  	
  3.5(b)(1)

  
	
  Significant
  Subsidiary

  	
   

  	
  2.2(c)

  
	
  Subsidiary

  	
   

  	
  2.2(c)

  
	
  WM Funding

  	
   

  	
  2.2(b)

  
	
  WMB

  	
   

  	
  2.2(a)

  



 

















 


SECURITIES PURCHASE
AGREEMENT, dated as of April 7, 2008 (this “Agreement”),  between Washington Mutual, Inc., a Washington
corporation (the “Company”),  and
the purchasers named on the signature pages to this Agreement (the “Purchasers”).


 


RECITALS:


 


WHEREAS, the Company
intends to sell to each Purchaser, and each Purchaser severally and not jointly
intends to purchase from the Company at the Closing (as defined below), shares
of Common Stock, no par value, of the Company (the “Common Stock”, and the shares so purchased pursuant hereto,
the “Shares”), as described herein with
respect to such Purchaser.


 


NOW, THEREFORE, in
consideration of the premises, and of the representations, warranties,
covenants and agreements set forth herein, the parties agree as follows:


 


ARTICLE
I


 


PURCHASE;
CLOSINGS


 


1.1   Purchase. On the terms and subject to
the conditions set forth herein, each Purchaser, severally and not jointly,
agrees that it will purchase from the Company, and the Company agrees that it
will sell to each such Purchaser, the number of Shares set forth opposite such
Purchaser’s name on such Purchaser’s signature page to this Agreement.


 


1.2  
Closing.


 


(a)  
For each Purchaser, subject to the satisfaction or waiver of the conditions set
forth in this Agreement with respect to the purchase and sale by such
Purchaser, the closing of the purchase and sale of the Shares pursuant hereto
(the “Closing”)  shall occur at 9:30 a.m., New York time, on April 11,
2008, or on such later date as the Company may by written notice specify to
such Purchaser, at the offices of Simpson Thacher & Bartlett LLP
located at 425 Lexington Avenue, New York, New York 10017 or such other date or
location as agreed by the parties. The date of the Closing is referred to as
the “Closing Date.”


 


(b)  
Subject to the satisfaction or waiver of the conditions to the Closing in Section 1.2(c),
at the Closing, the Company will deliver to each Purchaser one stock
certificate representing the total number of Shares to be purchased by such
Purchaser pursuant hereto, registered in the name of such Purchaser or such
other person (which shall be an Affiliate or nominee of such Purchaser or such
Affiliate) as such Purchaser may have designated in writing to the Company not
less than one business day prior to the Closing, against payment therefor by
wire transfer by such Purchaser of immediately available United States funds to
a bank account designated by the Company, for an aggregate purchase price equal
to the amount set forth on such Purchaser’s signature page to this
Agreement.


 


1

















 


(c)  
Closing Conditions.


 


(1)  The respective obligations of
each Purchaser on the one hand, and the Company, on the other hand, to
consummate the Closing is subject to the fulfillment or written waiver by the
applicable Purchaser and the Company prior to the Closing of the following
conditions:


 


(A)  
no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the Closing;


 


(B)  
the shares of Common Stock to be issued at the Closing shall have
been authorized for listing on the New York Stock Exchange or such other market
on which the Common Stock is then listed or quoted, subject to official notice
of issuance; and


 


(C)  
the Company shall have issued and sold shares of capital stock on
or after the date hereof and on or prior to the Closing Date and received
aggregate proceeds in respect thereof (including the proceeds to be received
from such Purchaser) of not less than $4.9 billion in the aggregate; provided, that for purposes of this clause (C), to the
extent there exist at Closing contractual obligations of purchasers to deliver
funds in respect of any such sales within not more than 14 days following
Closing, the funds subject to such contractual obligations shall be considered
to be proceeds received for purposes of this provision.


 


(2)  The obligation of each
Purchaser to consummate the purchase of Shares to be purchased by it at the
Closing is also subject to the fulfillment or written waiver by such Purchaser
prior to the Closing of each of the following conditions:


 


(A)  
the Company shall have performed in all material respects all
obligations required to be performed by it at or prior to Closing; and


 


(B)  
such Purchaser shall have received a certificate signed on behalf
of the Company by a senior executive officer certifying to the effect that the
conditions set forth in Section 1.2(c)(2)(A) has been satisfied.


 


ARTICLE
II


 


REPRESENTATIONS
AND WARRANTIES


 


2.1  Disclosure. (a)  On or prior to the date hereof, the Company
delivered to each Purchaser and each Purchaser delivered to the Company a
schedule (“Disclosure Schedule”) setting forth,
among other things, items the disclosure of which is necessary or appropriate
either in response to an express disclosure requirement contained in a
provision hereof or as an exception to one or more representations or
warranties contained in Section 2.2 with respect to the Company, or in Section
2.3 with respect to such Purchaser, or to one or more of its covenants
contained in Article III.


 


(b)  As
used in this Agreement, any reference to any fact, change, circumstance or
effect being “material” with respect to the Company means such fact, change,
circumstance or effect is material in relation to the business, results of
operations or financial condition of the Company and the Company Subsidiaries
taken as a whole. As used in this Agreement, the term


 


2

















 


“Material Adverse Effect” means any
circumstance, event, change, development or effect that, individually or in the
aggregate, (1) is material and adverse to the business, results of
operations or financial condition of the Company and Company Subsidiaries taken
as a whole or (2) would materially impair the ability of the Company to
perform its obligations under this Agreement or to consummate the Closing; provided, however, that in determining whether a Material
Adverse Effect has occurred, there shall be excluded the following: (A) changes
in generally accepted accounting principles or regulatory accounting principles
applicable to banks, savings associations or their holding companies, (B) changes
in laws, rules and regulations of general applicability or interpretations
thereof by Governmental Entities, (C) actions or omissions of the Company
taken in accordance with the terms of this Agreement, (D) changes in
general economic, monetary or financial conditions, including changes in
prevailing interest rates, credit markets, secondary mortgage market conditions
or housing price appreciation/depreciation trends, (E) changes in the
market price or trading volumes of the Common Stock or the Company’s other
securities, (F) the failure of the Company to meet any internal or public
projections, forecasts, estimates or guidance (including guidance as to “earnings
drivers”) for any period ending on or after December 31, 2007, (G) changes
in global or national political conditions, including the outbreak or
escalation of war or acts of terrorism, and (H) the public disclosure of
this Agreement or the transactions contemplated hereby.


 


(c)  “Previously Disclosed”  means information (1) set forth on
the Disclosure Schedule or (2)  publicly disclosed by the Company in the
Company SEC Reports filed by it with or furnished to the Securities and
Exchange Commission (“SEC”) and
publicly available prior to the date of this Agreement (excluding any risk
factor disclosures contained in such documents under the heading “Risk Factors”
and any disclosure of risks included in any “forward-looking statements”
disclaimer or other statements that are similarly non-specific and are
predictive or forward-looking in nature).


 


2.2  Representations and Warranties of the
Company. Except as Previously Disclosed, the Company represents and
warrants to the Purchasers as of the date of this Agreement that:


 


(a)   Organization
and Authority. The Company is a corporation duly organized and validly
existing under the laws of the State of Washington, is duly qualified to do
business and is in good standing in all jurisdictions where its ownership or
leasing of property or the conduct of its business requires it to be so
qualified and where failure to be so qualified would have a Material Adverse
Effect, and has the corporate power and authority to own its properties and
assets and to carry on its business as it is now being conducted. The Company
is duly registered as a savings and loan holding company under the Home Owners’
Loan Act, as amended (“HOLA”).
Washington Mutual Bank (“WMB”) is duly
organized and in good standing as a federal savings association under HOLA and
its deposits are insured by the Federal Deposit Insurance Corporation to the
fullest extent permitted by law.  WMB is
a member in good standing of the Federal Home Loan Bank of San Francisco.


 


(b)   Capitalization.  The
authorized capital stock of the Company consists of 1,600,000,000 shares of
Common Stock and 10,000,000 shares of preferred stock, no par value, of the
Company (the “Company Preferred Stock”).  As of the close of business on


 


3

















 


March 31, 2008 (the “Capitalization Date”), there were 882,140,637 shares of
Common Stock outstanding and 3,000,500 shares of Preferred Stock outstanding,
consisting of 500 shares of Series K Perpetual Non-cumulative Floating
Rate Preferred Stock and 3,000,000 shares of 7.75% Series R Non-cumulative
Perpetual Convertible Preferred Stock (the “Series R Preferred
Stock”).  As of the close of
business on the Capitalization Date, no shares of Common Stock or Preferred
Stock were reserved or to be made available for issuance, except for (1) (A) 83,311,421
shares of Common Stock reserved or to be made available for issuance upon the
exercise of options to purchase Common Stock, (B) 2,186,394 share of
Common Stock reserved or to be made available for issuance upon the vesting of
restricted stock units and (C) 949,369 shares of Common Stock reserved or
to be made available for issuance upon the vesting of performance share awards,
(2) 834,322 shares of Common Stock reserved or to be made available for
issuance under the 2002 Employee Stock Purchase Plan, (3) 563 shares of
Common Stock reserved or to be made available for issuance upon conversion of
the Company’s 2.75% Convertible Cash to Accreting Senior Notes due March 15,
2016, (4) 1,176,502 shares of Common Stock reserved or to be made
available for issuance upon conversion of the Company’s 4% Convertible Senior
Notes due May 15, 2008, (5) 141,176,471 shares of Common Stock
reserved or to be made available for issuance upon conversion of the Series R
Preferred Stock, (6) 29,242,092 shares of Common Stock reserved or to be
made available for issuance pursuant to the Company’s Trust Warrants issued
pursuant to the Warrant Agreement, dated as of April 30, 2001 between the
Company and The Bank of New York, (7) approximately 11,900,000 shares of
Common Stock reserved or to be made available for issuance pursuant to
Litigation Warrants issued pursuant to the Amended and Restated Warrant Agreement,
dated as of March 11, 2003 between the Company and Mellon Investor
Services LLC, (8) 700,000 shares of Company Preferred Stock designated as Series RP
Preferred Stock, par value $0.01 per share, reserved or to be made available
for issuance upon the exercise of rights granted under the Rights Agreement,
dated as of December 20, 2000 between the Company and Mellon Investor
Services, L.L.C., (9) 1,250 shares of Series I Perpetual
Non-cumulative Fixed-to-Floating Rate Preferred Stock reserved or to be made
available for issuance upon conversion of the Series 2006-A Convertible
Preferred Securities issued by Washington Mutual Preferred Funding LLC (“WM Funding”), (10) 750 shares of Series J
Perpetual Non-cumulative Fixed Rate Preferred Stock reserved or to be made
available for issuance upon conversion of the Series 2006-B Convertible
Preferred Securities of WM Funding, (11) 500 shares of Series L Perpetual
Non-cumulative Fixed-to-Floating Rate Preferred Stock reserved or to be made
available for issuance upon conversion of the Series 2006-C Convertible
Preferred Securities of WM Funding, (12) 500 shares of Series M Perpetual
Non-cumulative Fixed-to-Floating Rate Preferred Stock reserved or to be made
available for issuance upon conversion of the Series 2007-A Convertible
Preferred Securities of WM Funding, and (13) 1,000 shares of WM Series N
Non-cumulative Fixed-to-Floating Rate Preferred Stock reserved or to be made
available for issuance upon conversion of the Series 2007-B Convertible
Preferred Securities of WM Funding.  All
of the issued and outstanding shares of Common Stock and Company Preferred
Stock have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof.


 


4














 


(c)  Company’s
Subsidiaries.  Exhibit 21 to the
Company’s Annual Report on Form 10-K for the year ended December 31,
2007 sets forth a correct and complete list of the Company Subsidiaries,
including the Company’s Significant Subsidiaries.  Each of the Company’s Significant
Subsidiaries is duly organized and validly existing under the laws of its
jurisdiction of organization, is duly qualified to do business and is in good
standing in all jurisdictions where its ownership or leasing of property or the
conduct of its business requires it to be so qualified and where failure to be
so qualified or in good standing would have a Material Adverse Effect.  The Company owns, directly or indirectly, all
of the issued and outstanding shares of capital stock of or all other equity
interests in each of the Company Subsidiaries, free and clear of any liens,
charges, encumbrances, adverse rights or claims and security interests
whatsoever (“Liens”), and all of such shares
are duly authorized and validly issued and are fully paid, nonassessable and
free of preemptive rights, with no personal liability attaching to the
ownership thereof.  As used herein, “Subsidiary” means, with respect to any  person,
any corporation, partnership, joint venture, limited liability company or other
entity (1) of which such person or a subsidiary of such person is a
general partner or (2) at least a majority of the securities or other
interests of which having by their terms ordinary voting power to elect a
majority of the board of directors or persons performing similar functions with
respect to such entity is directly or indirectly owned by such person and/or
one or more subsidiaries thereof; “Company Subsidiary”
means any Subsidiary of the Company; and “Significant Subsidiary”
means, with respect to any person, any Subsidiary that would constitute a “significant
Subsidiary” of such person within the meaning of Rule 1-02 of Regulation
S-X of the SEC.


 


(d)   Authorization.
(1) The Company has the corporate power and authority to enter into this Agreement
and to carry out its obligations hereunder. The execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby have been duly authorized by the board of
directors of the Company (the “Board of Directors”).
Subject to such approvals of federal, state, local and foreign authorities,
agencies, courts, commissions or other entities, including stock exchanges and
other self-regulatory organizations (collectively, “Governmental Entities”)  referred
to in Section 2.2(d), and assuming due authorization, execution and
delivery by the applicable Purchaser, this Agreement is a valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms, subject bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting creditors generally or by general equitable principles
(whether applied in equity or at law). 
No vote of the Company’s shareholders is required for the execution and
delivery by the Company of this Agreement, the performance by it of its
obligations hereunder or the consummation by it of the transactions
contemplated hereby.


 


(2)  Neither the
execution and delivery by the Company of this Agreement, nor the consummation
of the transactions contemplated hereby, nor compliance by the Company with any
of the provisions hereof, will (i) violate, conflict with, or result in a
breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result
in the termination of, or accelerate the performance required by, or result in
a right of termination or acceleration of, or result in the creation of any
Lien upon any of the material properties or assets of the 


 


5

















 


Company or any
Company Subsidiary under any of the terms, conditions or provisions of (A) its
articles of incorporation or bylaws (or similar governing documents) or (B) any
note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which the Company or any Company Subsidiary
is a party or by which it may be bound, or to which the Company or any Company
Subsidiary or any of the properties or assets of the Company or any Company
Subsidiary may be subject, or (ii) subject to compliance with the statutes
and regulations referred to in Section 2.2(d), violate any statute, rule or
regulation or, to the knowledge of the Company, any judgment, ruling, order,
writ, injunction or decree applicable to the Company or any Company Subsidiary
or any of their respective properties or assets, except in the case of clauses
(i)(B) and (ii) for such violations, conflicts and breaches as would
not reasonably be expected to have a Material Adverse Effect.


 


(e)   Governmental
Consents. Other than as Previously Disclosed, and the securities or blue
sky laws of the various states, no material notice to, filing with, exemption
or review by, or authorization, consent or approval of, any Governmental
Entity, nor expiration or termination of any statutory waiting periods, is
necessary for the consummation by the Company of the transactions contemplated
by this Agreement.


 


(f)   Financial
Statements. The consolidated balance sheets of the Company and the Company
Subsidiaries as of December 31, 2007 and 2006 and the related consolidated
statements of income, shareholders’ equity and cash flows for the three years
ended December 31, 2007, together with the notes thereto (collectively,
the “Company Financial Statements”) included
in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2007, as filed with the SEC, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis and present fairly
in all material respects the consolidated financial position of the Company and
the Company Subsidiaries as of the dates set forth therein and the consolidated
results of operations and cash flows of the Company and the Company Subsidiaries
for the periods stated therein.


 


(g)   SEC
Reports. (1) Since December 31, 2005, the Company and each
Company Subsidiary has filed all material reports, registration statements,
proxy statements and other documents, together with any required amendments
thereto, that it was required to file with any SEC (the foregoing,
collectively, the “Company SEC Reports”).
As of its date (or if amended prior to the date of this Agreement, as of the
date of such amendment), each Company SEC Report did not contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements made in it, in the light of the circumstances
under which they were made, not misleading and complied as to form in all
material respects with the applicable requirements of the Securities Act of
1933, as amended (the “Securities Act”),
and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).


 


(2)  The records,
systems, controls, data and information of the Company and the Company
Subsidiaries are recorded, stored, maintained and operated under means
(including any electronic, mechanical or photographic process, whether
computerized or not) that are under the exclusive ownership and direct control
of the Company or the 


 


6

















 


Company
Subsidiaries or their accountants (including all means of access thereto and
therefrom), except for any non-exclusive ownership and non-direct control that
would not reasonably be expected to have a Material Adverse Effect. The Company
(A) has implemented and maintains disclosure controls and procedures (as
defined in Rule 13a-15(e) of the Exchange Act) to ensure that
material information relating to the Company, including the consolidated
Company Subsidiaries, is made known to the chief executive officer and the
chief financial officer of the Company by others within those entities, and (B) has
disclosed, based on its most recent evaluation prior to the date hereof, to the
Company’s outside auditors and the audit committee of the Board of Directors (x) any
significant deficiencies and material weaknesses in the design or operation of
internal controls over financial reporting (as defined in Rule 13a-15(f) of
the Exchange Act) that are reasonably likely to adversely affect the Company’s
ability to record, process, summarize and report financial information and (y) any
fraud, whether or not material, that involves management or other employees who
have a significant role in the Company’s internal controls over financial
reporting.


 


(h)   Offering
of Securities. Neither the Company nor any person acting on its behalf has
taken any action (including any offering of any securities of the Company under
circumstances which would require the integration of such offering with the
offering of any of the Shares to be issued pursuant to this Agreement under the
Securities Act and the rules and regulations of the SEC thereunder) which
might subject the offering, issuance or sale of any of the Shares to the
Purchasers pursuant to this Agreement to the registration requirements of the
Securities Act.


 


(i)   Status
of Shares. The shares of Common Stock to be issued pursuant to this
Agreement have been duly authorized by all necessary corporate action. When
issued and sold against receipt of the consideration therefor as provided in
this Agreement, such shares of Common Stock will be validly issued, fully paid
and nonassessable, will not subject the holders thereof to personal liability
and will not be subject to preemptive rights of any other shareholder of the
Company.


 


(j)   Litigation
and Other Proceedings.  There is no
pending or, to the knowledge of the Company, threatened, claim, action, suit,
investigation or proceeding, against the Company or any Company Subsidiary, nor
is the Company or any Company Subsidiary subject to any order, judgment or
decree, in each case except as would not reasonably be expected to have a
Material Adverse Effect.


 


(k)   Compliance
with Laws. The Company and each Company Subsidiary have all material
permits, licenses, authorizations, orders and approvals of, and have made all
filings, applications and registrations with, Governmental Entities that are
required in order to permit them to own or lease their properties and assets
and to carry on their business as presently conducted and that are material to
the business of the Company or such Company Subsidiary. The conduct by the
Company and each Company Subsidiary of their business as presently conducted
does not violate or infringe any applicable material domestic (federal, state
or local) or foreign law, statute, ordinance, license or regulation in any
material respect. Neither the Company nor any Company Subsidiary is in material
default under any order, license, regulation, demand, writ, injunction or 


 


7

















 


decree of any Governmental Entity. The
Company and the Company Subsidiaries currently are complying with all
applicable federal, state, local and foreign laws, regulations, rules,
judgments, injunctions or decrees, except to the extent any noncompliance would
not reasonably be expected to have a Material Adverse Effect.


 


2.3  Representations and Warranties of the
Purchaser.  Each Purchaser, severally
and not jointly, hereby represents and warrants to the Company that as of the
date of this Agreement:


 


(a)   Organization
and Authority.  Such Purchaser is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, is duly qualified to do business and is in
good standing in all jurisdictions where its ownership or leasing of property
or the conduct of its business requires it to be so qualified and where failure
to be so qualified would be reasonably expected to materially adversely affect
such Purchaser’s ability to perform its obligations under this Agreement or
consummate the transactions contemplated hereby on a timely basis, and such
Purchaser has the corporate or other power and authority to own its properties
and assets and to carry on its business as it is now being conducted.


 


(b)   Authorization.
(1)  Such Purchaser has the corporate or other power and authority to
enter into this Agreement and to carry out its obligations hereunder. The
execution, delivery and performance of this Agreement by such Purchaser and the
consummation of the transactions contemplated hereby have been duly authorized
by the Purchaser’s board of directors, general partner  or
managing members, as the case may be, and no further approval or authorization
by any of its shareholders, partners or other equity owners, as the case may
be, is required. This Agreement is a valid and binding obligation of such
Purchaser enforceable against such Purchaser in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganizations or similar laws affecting creditors generally or by
general equitable principles (whether applied in equity or at law).


 


(2)   Other than the securities or
blue sky laws of the various states, no notice to, filing with, exemption or
review by, or authorization, consent or approval of, any Governmental Entity,
nor expiration or termination of any statutory waiting period, is necessary for
the consummation by such Purchaser of the transactions contemplated by the this
Agreement.


 


(c)   Ownership.  As of the date of this Agreement, such
Purchaser and its Affiliates are the owners of record or the Beneficial Owners
of the number of shares of Common Stock or securities convertible into or
exchangeable for Common Stock set forth on such Purchaser’s signature page.


 


(d)   Financial
Capability. Such Purchaser currently has available funds necessary to
consummate the Closing on the terms and conditions contemplated by this
Agreement


 


8

















 


(e)   Purchase
for Investment.


 


(1)   Such Purchaser (and any
investor account for which it is purchasing Shares) is either (i) a
qualified institutional buyer as defined under Rule 144A under the
Securities Act (“QIB”) or (ii) an institutional
“accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act, and has such knowledge and experience in
financial and business matters so as to be capable of evaluating the merits and
risks of its investment in the Shares, and such Purchaser (and any investor
account for which it is purchasing Shares) is able to bear the economic risk of
its investment and can afford a complete loss of its investment.


 


(2)   Such Purchaser understands
and agrees on behalf of itself and on behalf of any investor account for which
it is purchasing Shares, and each subsequent holder of a Security by its
acceptance thereof will be deemed to agree, that the Shares are being offered
in a transaction not involving any public offering within the meaning of the
Securities Act, that the Shares have not been and, except as contemplated by Section 3.5,
will not be, registered under the Securities Act and that, unless the Shares
are sold in a registered offering under the Securities Act, (i) such
Purchaser may offer, sell, pledge or otherwise transfer any of the Shares only
to a person whom the seller reasonably believes is a QIB in a transaction not
involving a public offering and (ii) if prior to the expiration of the
applicable holding period specified in Rule 144(k) of the Securities
Act (or any successor provision) such Purchaser decides to offer, resell,
pledge or otherwise transfer any Shares, such Shares may be offered, resold,
pledged or otherwise transferred only (A) to a person whom the seller
reasonably believes is a QIB in a transaction not involving a public offering, (B) pursuant
to an exemption from registration under the Securities Act provided by Rule 144
thereunder (if available), (C) pursuant to an effective registration statement
under the Securities Act, or (D) to the Company or one of its
subsidiaries, in each of cases (A) through (D) in accordance with any
applicable securities laws of any State of the United States, and that (iii) such
Purchaser will, and each subsequent holder is required to, notify any
subsequent purchaser of the Shares from it of the resale restrictions referred
to in (i) and (ii) above, as applicable, and will provide the Company
and the transfer agent such certificates and other information as they may
reasonably require to confirm that the transfer by it complies with the
foregoing restrictions, if applicable.


 


(3)   Such Purchaser acknowledges
that it (i) has conducted its own investigation of the Company, (ii) has
had access to the Company’s public filings with the Securities and Exchange
Commission and to such financial and other information as it deems necessary to
make its decision to purchase the Shares, and (iii) has been offered the
opportunity to ask questions of the Company and received answers thereto, as it
deemed necessary in connection with the decision to purchase the Shares.


 


(4)   The Shares to be purchased by
such Purchaser are not being acquired, directly or indirectly, with the assets
of any “employee benefit plan” (a “Benefit Plan”)
within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”) or, if
the assets of a Benefit Plan are being used, directly or indirectly, for such
acquisition, neither the acquisition nor holding of such Shares will result in
a nonexempt prohibited transaction under ERISA or the Internal Revenue Code of
1986, as amended.


 


9

















 


(5)   Such Purchaser is acquiring
the Shares for its own account, and not with a view toward, or for sale in
connection with, any distribution thereof in violation of any federal or state
securities or “blue sky” law, or with any present intention of distributing or
selling such Shares in violation of the Securities Act.


 


(6)   Such Purchaser understands
that (i) the Shares are being offered and sold without registration under
the Securities Act in a transaction that is exempt from the registration
requirements of that Act, (ii) such exemption depends, in part, on the
accuracy and truthfulness of the foregoing representations of such Purchaser
and (iii) the Company will rely upon the truth and accuracy of the
foregoing representations, acknowledgements and agreements and agrees that if
any of the representations and acknowledgements deemed to have been made by it
by its purchase of the Shares is no longer accurate, it shall promptly notify
the Company. If such Purchaser is acquiring Shares as a fiduciary or agent for
one or more investor accounts, such Purchaser represents that is has sole
investment discretion with respect to each such account and it has full power
to make the foregoing representations, acknowledgements and agreements on
behalf of such account.


 


(7)   Such Purchaser understands
that nothing in this Agreement, the Company SEC Reports or any other materials
presented to such Purchaser in connection with the purchase and sale of the
Shares constitutes legal, tax or investment advice. Such Purchaser has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of the
Shares and has made its own assessment and has satisfied itself concerning the
relevant tax and other economic considerations relevant to its investment in
the Shares.


 


ARTICLE
III


 


ADDITIONAL
AGREEMENTS


 


3.1   Other Actions. (a)  Each Purchaser, on the one hand, and the
Company, on the other hand, will cooperate and consult with the other and use
reasonable best efforts to prepare and file all necessary documentation, to
effect all necessary applications, notices, petitions, filings and other
documents, and to obtain all necessary permits, consents, orders, approvals and
authorizations of, or any exemption by, all third parties and Governmental
Entities, and the expiration or termination of any applicable waiting periods,
necessary or advisable to consummate the transactions contemplated by this
Agreement, and to perform the covenants contemplated by this Agreement.


 


(b)  
Each Purchaser, on the one hand, and the Company, on the other hand, agrees,
upon request, to furnish the other party with all information concerning
itself, its Affiliates, directors, officers, partners and shareholders and such
other matters as may be reasonably necessary or advisable in connection with
any statement, filing, notice or application made by or on behalf of such other
party or any of its Subsidiaries to any Governmental Entity in connection with
the Closing and the other transactions contemplated by this Agreement.


 


10

















 


(c)  
Unless this Agreement has been terminated pursuant to Section 4.1, each
Purchaser hereby agrees that at any meeting of the shareholders of the Company
held to vote on the proposals (collectively, the “Shareholder
Proposals”) to (1) approve the conversion of a series of
contingent convertible perpetual non-cumulative preferred stock, no par value,
of the Company (the “Convertible Preferred
Stock”) into Common Stock for purposes of Section 312.03 of the
NYSE Listed Company Manual, and (2) amend the Company’s articles of
incorporation to, among other things, increase the number of authorized shares
of Common Stock to at least such number as shall be sufficient to permit the
full conversion of the Convertible Preferred Stock into Common Stock, however
called, such Purchaser shall vote, or cause to be voted, all of the shares of
Common Stock Beneficially Owned by such Purchaser and its Affiliates in favor
of the Shareholder Proposals.  For
purposes of this Agreement, a person shall be deemed to “Beneficially
Own” any securities of which such person or any such person’s
Affiliates is considered to be a “Beneficial Owner”
under Rule 13d-3 under the Exchange Act.


 


3.2   Exchange Listing. The Company shall
promptly use its reasonable best efforts to cause the shares of Common Stock to
be issued pursuant to this Agreement to be approved for listing on the New York
Stock Exchange, subject to official notice of issuance, as promptly as
practicable, and in any event before the Closing.


 


3.3   Legend. (a)  The Purchasers agree that all certificates or
other instruments representing the Shares subject to this Agreement will bear a
legend substantially to the following effect:


 


THIS SECURITY (OR ITS PREDECESSOR) WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS
SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.


 


THE HOLDER OF THIS SECURITY AGREES FOR THE
BENEFIT OF THE COMPANY THAT THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED, ONLY (1) PURSUANT TO ANY OTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, INCLUDING RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) SUBJECT TO THE ISSUER’S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (A) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO IT, (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR (3) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES,
IN EACH OF CASES (1) THROUGH (3) IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.


 


(b)  
Upon request of a Purchaser, upon receipt by the Company of an opinion of
counsel reasonably satisfactory to the Company to the effect that such legend
is no longer required under the Securities Act and applicable state laws, the
Company shall promptly cause 


 


11

















 


the legend to be
removed from any certificate for any Shares to be Transferred in accordance
with the terms of this Agreement. Each Purchaser severally and not jointly
acknowledges that the Shares have not been registered under the Securities Act
or under any state securities laws and agrees that it will not sell or
otherwise dispose of any of the Shares, except in compliance with the
registration requirements or exemption provisions of the Securities Act and any
other applicable securities laws.


 


3.4   Indemnity. (a)  The Company agrees to indemnify and hold
harmless each Purchaser and its Affiliates and each of their respective
officers and directors, and each person who controls such Purchaser within the
meaning of the Exchange Act and the regulations thereunder, to the fullest
extent lawful, from and against any and all actions, suits, claims,
proceedings, costs, losses, liabilities, damages, expenses (including
reasonable attorneys’ fees and disbursements), amounts paid in settlement and
other costs (collectively, “Losses”)
arising out of or resulting from (1) subject to the standard set forth in
Section 5.2, any inaccuracy in or breach of the Company’s representations or
warranties in this Agreement, or (2) the Company’s breach of agreements or
covenants made by the Company in this Agreement; provided
that Losses shall not include any consequential or punitive damages.


 


(b)  
A party entitled to indemnification hereunder (each, an “Indemnified Party”)  shall give written notice to the Company  of any claim with respect to which it
seeks indemnification promptly after the discovery by such Indemnified Party of
any matters giving rise to a claim for indemnification; provided that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Company of its obligations under this Section 3.4 unless and to the extent
that the Company shall have been actually prejudiced by the failure of such
Indemnified Party to so notify such party. Such notice shall describe in
reasonable detail such claim. In case any such action, suit, claim or
proceeding is brought against an Indemnified Party, the Indemnified Party shall
be entitled to hire, at its own expense, separate counsel and participate in
the defense thereof; provided, however, that
the Company shall be entitled to assume and conduct the defense thereof, unless
the counsel to the Indemnified Party advises such Indemnified Party in writing
that such claim involves a conflict of interest (other than one of a monetary
nature) that would make it inappropriate for the same counsel to represent both
the Company and the Indemnified Party, in which case the Indemnified Party
shall be entitled to retain its own counsel at the cost and expense of the
Company (except that the Company shall only be liable for the legal fees and
expenses of one law firm for all Indemnified Parties, taken together with
respect to any single action or group of related actions). If the Company
assumes the defense of any claim, all Indemnified Parties shall thereafter
deliver to the Company copies of all notices and documents (including court
papers) received by the Indemnified Party relating to the claim, and each
Indemnified Party shall cooperate in the defense or prosecution of such claim.
Such cooperation shall include the retention and (upon the Company’s request)
the provision to the Company of records and information that are reasonably
relevant to such claim, and making employees available on a mutually convenient
basis to provide additional information and explanation of any material
provided hereunder. The Company shall not be liable for any settlement of any
action, suit, claim or proceeding effected without its written consent; provided, however, that the Company shall
not unreasonably withhold or delay its consent. The Company further agrees that
it will not, without the Indemnified Party’s prior written consent (which shall
not be unreasonably withheld or delayed), settle or compromise any claim or
consent to entry of any judgment in respect thereof in any pending or
threatened action, 


 


12

















 


suit, claim or
proceeding in respect of which indemnification has been sought hereunder unless
such settlement or compromise includes an unconditional release of such
Indemnified Party from all liability arising out of such action, suit, claim or
proceeding.


 


(c)  
The cumulative indemnification obligation of the Company to any Purchaser and
its related Indemnified Parties for inaccuracies in or breaches of
representations and warranties shall in no event exceed the aggregate purchase
price paid by such Purchaser for the Shares purchased pursuant to this
Agreement.


 


(d)  
Any claim for indemnification pursuant to this Section 3.4 for breach of
any representation or warranty can only be brought on or prior to the first
anniversary of the Closing Date.


 


(e)  
The indemnity provided for in this Section 3.4 shall be the sole and
exclusive monetary remedy of Indemnified Parties after the Closing for any
inaccuracy of any representation or warranty of the Company or any breach of
any covenant or agreement of the Company contained in this Agreement; provided that nothing herein shall limit
in any way any Purchaser’s remedies in respect of fraud by any other party in
connection with the transactions contemplated hereby.


 


3.5  
Registration Rights.


 


(a)  
Defined Terms.  As used in this Section 3.5,
the following terms have the following meanings:


 


(1)    “Disclosure Package”
means, with respect to any offering of securities, (i) the preliminary
Prospectus, (ii) each Free Writing Prospectus and (iii) all other
information, in each case, that is deemed, under Rule 159 promulgated
under the Securities Act, to have been conveyed to purchasers of securities at
the time of sale of such securities (including a contract of sale).


 


(2)   “Free Writing
Prospectus” means any “free writing prospectus” as defined in Rule 405
promulgated under the Securities Act.


 


(3)   “Holder”
means any Purchaser and any Transferee of Registrable Securities.


 


(4)   “Holder Free
Writing Prospectus” means each Free Writing Prospectus prepared by
or on behalf of the relevant Holder or used or referred to by such Holder in
connection with the offering of Registrable Securities.


 


(5)   “Registrable Securities”  means
(i) the Shares and any securities which may be issued or issued or
issuable in respect of such shares by way of share dividend or share split or
in connection with a combination of shares, recapitalization, reclassification,
merger, amalgamation, arrangement, consolidation or other reorganization. As to
any particular securities constituting Registrable Securities, such securities
will cease to be Registrable Securities when (w) a registration statement
with respect to the sale by the Holder thereof shall have been declared
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, 


 


13

















 


(x) such securities have been sold to the public pursuant to Rule 144
or Rule 145 or other exemption from registration under the Securities Act,
(y) such securities have been acquired by the Company or (z) such
securities are able to be sold by a Holder without restriction as to volume or
manner of sale pursuant to Rule 144(k) under the Securities Act.


 


(6)   “Selling Holders”
means, with respect to any underwritten offering, the Holders whose Registrable
Securities are included for sale pursuant to such underwritten offering.


 


(b)  
Shelf Registration.


 


(1)   As soon as reasonably
practicable following the Closing (but in any event no later than twenty days
after the Closing Date), the Company shall use its reasonable best efforts to
qualify for registration on, and will promptly file , Form S-3 or any
comparable or successor form or forms or any similar short-form registration,  and such registration will be a “shelf”
registration statement providing for the registration, and the sale on a
continuous or delayed basis, of the Registrable Securities pursuant to Rule 415
(such registration statement, a “Shelf Registration
Statement” and such registration, a “Shelf
Registration”). In no event shall the Company be obligated to effect
any shelf registration other than pursuant to a short-form registration. Upon
filing a Shelf Registration, subject to Section 3.5(b)(3), the Company
shall keep such Shelf Registration effective with the SEC at all times and any
Shelf Registration shall be re-filed upon its expiration, and the Company shall
cooperate in any shelf take-down by amending or supplementing the prospectus
related to such Shelf Registration as may be requested by the Holders or as
otherwise required, until the Holders who would require such registration to
effect a sale of the Registrable Securities no longer hold the Registrable
Securities (such period of effectiveness, the “Shelf Period”).
The Company shall use its commercially reasonable best efforts to remain a
well-known seasoned issuer (as defined in Rule 405 under the Securities
Act) and to not become an ineligible issuer (as defined in Rule 405 under
the Securities Act) during the Shelf Period.


 


(2)   The Company shall pay all
Registration Expenses incurred in connection with any Shelf Registration.


 


(3)   The Company shall be entitled
to postpone the filing or initial effectiveness of, or suspend the use of, any
Shelf Registration Statement if the Company gives to the Holders a certificate
signed by the Chief Executive Officer or Chief Financial Officer of the Company
certifying that, in the good faith judgment of the Board of Directors, such
registration, offering or use would (i) be expected to adversely affect or
interfere with any bona fide material financing of the Company or any material
transaction under consideration by the Company or (ii) require the
disclosure of information that has not been, and is not otherwise required to
be, disclosed by the Company and such disclosure, in the good faith judgment of
the Board of Directors, would be expected to adversely affect the Company or
its business or adversely affect or interfere with any bona fide material
financing of the Company or any material transaction under consideration by the
Company; provided that the
Company shall not be permitted to do so (x) for more than 


 


14

















 


60 days for a given occurrence of such a
circumstance, (y) more than three times during any twelve-month period or (z) for
periods exceeding, in the aggregate, 120 days during any twelve-month
period.  In the event the Company
exercises its rights under the preceding sentence, each Holder agrees,
severally and not jointly, to suspend, promptly upon its receipt of the notice
referred to above, its use of any prospectus relating to such registration in
connection with any sale or offer to sell Registrable Securities.


 


(c)  
Registration Procedures.  In
connection with its obligations with respect to the Shelf Registration
Statement pursuant to Section 3.5(b), the Company shall use its reasonable
best efforts to as expeditiously as possible:


 


(1)   prepare and file with the SEC
a Shelf Registration Statement on such form as is required pursuant to the
terms hereof and which shall be available for the sale of the Registration with
respect to such Registrable Securities, make all required filings with the
National Association of Securities Dealers and the Financial Industry
Regulatory Authority and thereafter use its reasonable best efforts to cause
such Shelf Registration Statement to become effective as soon as reasonably
practicable;


 


(2)   prepare and file with the SEC
such amendments and supplements to such Shelf Registration Statement as may be
necessary to keep such Shelf Registration Statement effective during the period
provided for herein, and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Shelf Registration
Statement until such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such Shelf Registration Statement;


 


(3)   furnish to each Holder such
number of copies, without charge, of such Shelf Registration Statement, each
amendment and supplement thereto, including each preliminary prospectus, final
prospectus, any other prospectus (including any prospectus filed under Rule 424,
Rule 430A or Rule 430B under the Securities Act and any “issuer free
writing prospectus” as such term is defined under Rule 433 promulgated
under the Securities Act), all exhibits and other documents filed therewith and
such other documents as such Holder may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such Holder;


 


(4)   register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any Holder (or managing underwriter, if any, in the case of an
underwritten offering) reasonably requests and do any and all other acts and
things that may be reasonably necessary or reasonably advisable to enable such
seller to consummate the disposition in such jurisdictions within the United
States of the Registrable Securities owned by such Holder (provided that the Company will not be
required to (i) qualify generally to do business in any jurisdiction where
it would not otherwise be required to qualify but for this subsection, (ii) subject
itself to taxation in any such jurisdiction or (iii) consent to general
service of process in any such jurisdiction);


 


15














 


(5)   notify each Holder and upon
discovery that, or upon the discovery of the happening of any event as a result
of which, the a prospectus with respect to any Registration Statement contains
an untrue statement of a material fact or omits any fact necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made, and, as soon as reasonably practicable, prepare and furnish to
such Holder a reasonable number of copies of a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an untrue statement of
a material fact or omit to state any fact necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made;


 


(6)   notify each Holder (i) when
the Shelf Registration Statement or the prospectus or any prospectus supplement
or post-effective amendment has been filed and, with respect to the Shelf
Registration Statement or any post-effective amendment, when the same has
become effective, (ii) of any request by the SEC for amendments or
supplements to the Shelf Registration Statement or to amend or to supplement
such prospectus or for additional information, and (iii) of the issuance
by the SEC of any stop order suspending the effectiveness of the Shelf
Registration Statement or the initiation of any proceedings for any of such
purposes;


 


(7)   cause all such Registrable
Securities to be listed on each securities exchange on which similar securities
issued by the Company are then listed or, if no similar securities issued by
the Company are then listed on any securities exchange, use its reasonable best
efforts to cause all such Registrable Securities to be listed on the New York
Stock Exchange or the NASDAQ stock market, as determined by the Company;


 


(8)   provide a transfer agent and
registrar for all such Registrable Securities not later than the effective date
of the Shelf Registration Statement;


 


(9)   in the case of an
underwritten offering, enter into such customary agreements (including
underwriting agreements and, subject to Section 3.5(g), lock-up agreements
in customary form, and including provisions with respect to indemnification and
contribution in customary form) and take all such other customary actions as
the Selling Holders or the managing underwriters, if any, reasonably request in
order to expedite or facilitate the disposition of such Registrable Securities;


 


(10)   in the case of an
underwritten offering, make available for inspection by the Holders’ Counsel,
any underwriter participating in any disposition pursuant to such Shelf
Registration Statement and any attorney, accountant or other agent retained by
any such underwriter, all financial and other records, pertinent corporate
documents and documents relating to the business of the Company, and cause the
Company’s officers, directors, employees and independent accountants to supply
all information reasonably requested by any of the foregoing in connection with
such offering, provided that it
shall be a condition to such inspection and receipt of such information that
the inspecting person (i) enter into a confidentiality agreement in form
and substance reasonably satisfactory to the Company and (ii) agree to
minimize the disruption to the Company’s business in connection with the
foregoing;


 


16

















 


(11)   timely provide to its
security holders earning statements satisfying the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder;


 


(12)   in the event of the issuance
of any stop order suspending the effectiveness of the Shelf Registration
Statement, or of any order suspending or preventing the use of any related
prospectus or ceasing trading of any securities included in the Shelf
Registration Statement for sale in any jurisdiction, use every reasonable
effort to promptly obtain the withdrawal of such order;


 


(13)   in the case of an
underwritten offering, obtain one or more comfort letters, addressed to the
underwriters, if any, dated the effective date of the Shelf Registration
Statement and the date of the closing under the underwriting agreement for such
offering, signed by the Company’s independent public accountants in customary
form and covering such matters of the type customarily covered by comfort
letters as such underwriters shall reasonably request;


 


(14)   in the case of an
underwritten offering, provide legal opinions of the Company’s counsel,
addressed to the underwriters, if any, dated the date of the closing under the
underwriting agreement, with respect to the Shelf Registration Statement, each
amendment and supplement thereto (including the preliminary prospectus) and
such other documents relating thereto as the underwriter shall reasonably
request in customary form and covering such matters of the type customarily
covered by legal opinions of such nature; and


 


(15)   As a condition to
registering Registrable Securities, the Company may require each Selling Holder
to furnish the Company with such information regarding such person and
pertinent to the disclosure requirements relating to the registration and the
distribution of such securities as the Company may from time to time reasonably
request in writing.


 


(d)  
Registration Expenses.


 


(1)   Except as otherwise provided
in this Agreement, all expenses incidental to the Company’s performance of or
compliance with this Agreement, including all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws, word
processing, duplicating and printing expenses, messenger and delivery expenses,
and fees and disbursements of counsel for the Company and all independent
certified public accountants and other persons retained by the Company (all
such expenses, “Registration Expenses”),  will be borne by the Company. The Company
will, in any event, pay its internal expenses (including all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expenses of any annual audit or quarterly review, the expenses of any
liability insurance and the expenses and fees for listing the securities to be
registered on each securities exchange on which similar securities issued by
the Company are then listed or on the New York Stock Exchange or the NASDAQ
stock market. The holders of the securities so registered shall pay all
underwriting discounts, selling commissions and transfer taxes applicable to
the sale of Registrable Securities hereunder and any other Registration Expenses
required by law to 


 


17

















 


be paid by a selling holder pro rata on the basis of the amount of
proceeds from the sale of their shares so registered.


 


(2)  
In connection with any underwritten offering pursuant to the
Shelf Registration Statement, the Company will reimburse the Sellers of
Registrable Securities for the reasonable fees and disbursements of one counsel
(“Holders’ Counsel”).


 


(e)  
Participation in Underwritten Registrations.


 


(1)   The Company shall not be
required to assist in an underwritten offering unless requested by the Holders
of a majority aggregate face amount of the Registrable Securities.  If any of the Registrable Securities covered
by any Shelf Registration Statement are to be sold in an underwritten offering,
the investment banker or investment bankers or manager or managers that will
manage the offering will be selected by the Company and shall be reasonably
acceptable to the Holders of a majority in aggregate face amount of the Registrable
Securities.


 


(2)   None of the Holders may
participate in any registration hereunder that is underwritten unless such
person (i) agrees to sell its Registrable Securities on the basis provided
in the underwriting arrangements entered into pursuant to this Agreement
(including pursuant to the terms of any over-allotment or “green shoe” option
requested by the managing underwriter(s)), (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements, and (iii) cooperates with the Company’s reasonable requests
in connection with such registration or qualification (it being understood that
the Company’s failure to perform its obligations hereunder, which failure is
caused by such person’s failure to cooperate with such reasonable requests,
will not constitute a breach by the Company of this Agreement). Notwithstanding
the foregoing, the liability of any Holder participating in such an
underwritten registration shall be limited to an amount equal to the amount of
gross proceeds attributable to the sale of such person’s Registrable
Securities.


 


(3)   Each person that is
participating in any registration hereunder agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in Section 3.5(c)(5) or
(6), such person will forthwith discontinue the disposition of its Registrable
Securities pursuant to the Shelf Registration Statement until such person
receives copies of a supplemented or amended prospectus as contemplated by such
Section 3.5(c)(5) and/or until the applicable circumstance referred
to in Section 3.5(c)(6) ceases to exist.


 


(f)  
Rule 144. The Company will use its reasonable best efforts to
timely file all reports and other documents required to be filed by it under
the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder (or, if the Company is not required to file such
reports, it will, upon the request of a Holder, make publicly available such
information as necessary to permit sales pursuant to Rule 144), all to the
extent required from time to time to enable such person to sell shares of
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144. Upon the 


 


18

















 


request of any
Holder, the Company will deliver to such person a written statement as to
whether it has complied with such information requirements.


 


(g)  
Indemnification; Contribution.


 


(1)   Indemnification by the
Company.  The Company shall indemnify
and hold harmless each Holder and each person who controls (within the meaning
of Section 15 of the Securities Act) such Holder from and against any and
all losses, claims, damages, liabilities and expenses, or any action or
proceeding in respect thereof (including reasonable costs of investigation and
reasonable attorneys’ fees and expenses) (each, a “Liability”)
arising out of or based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Disclosure Package or the
Registration Statement (including any prospectus or any amendment or supplement
thereto), and (ii) the omission or alleged omission to state in the
Disclosure Package or the Registration Statement (including any prospectus or
any amendment or supplement thereto) any material fact required to be stated
therein or necessary to make the statements therein not misleading; provided, however, that
the Company shall not be liable in any such case to the extent that any such
Liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Holder expressly for use therein.


 


(2)   Indemnification by Holders.   Each Holder, severally and not jointly,
shall indemnify and hold harmless the Company, any underwriter retained by the
Company, each other Holder, their respective directors, officers and each
person who controls the Company, such other Holders or such underwriter (within
the meaning of Section 15 of the Securities Act) from and against any and
all Liabilities arising out of or based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Disclosure
Package, any Holder Free Writing Prospectus or the Shelf Registration Statement
(including in any prospectus or any amendment or supplement thereto), and (ii) the
omission or alleged omission to state in the Disclosure Package, any Holder
Free Writing Prospectus or the Shelf Registration Statement (including in any
prospectus or any amendment or supplement thereto) any material fact required
to be stated therein or necessary to make the statements therein not
misleading, in each case, to the extent such Liabilities arise out of or are
based upon written information furnished by such Holder or on such Holder’s
behalf expressly for inclusion therein; provided that the total amount to be
indemnified by such Holder pursuant to this Section 3.5(g) shall be
limited to the net proceeds (after deducting the underwriters’ discounts and
commissions) received by such Holder in the offering to which the Shelf
Registration Statement, Disclosure Package or Holder Free Writing Prospectus
relates.


 


(3)   Conduct of Indemnification
Proceedings .  Any person entitled to
indemnification hereunder (the “indemnified person”) shall give prompt written
notice to the indemnifying party (the “indemnifying person”) after the receipt
by the indemnified person of any written notice of the commencement of any
action, suit, proceeding or investigation or threat thereof made in writing for
which the indemnified person intends to claim indemnification or contribution
pursuant to this Agreement; provided, however, 


 


19

















 


that the failure to so notify the
indemnifying person shall not relieve the indemnifying person of any Liability
that it may have to the indemnified person hereunder (except to the extent that
the indemnifying person forfeits substantive rights or defenses by reason of
such failure).  If notice of commencement
of any such action is given to the indemnifying person as above provided,
the indemnifying person shall be entitled to participate in and, to the extent
it may wish, jointly with any other indemnifying person similarly notified, to
assume the defense of such action at its own expense, with counsel chosen
by it and reasonably satisfactory to such indemnified person.  The indemnified person shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be paid by the
indemnified person unless (i) the indemnifying person agrees to pay the
same, (ii) the indemnifying person fails to assume the defense of such
action with counsel reasonably satisfactory to the indemnified person or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnifying person and the indemnified person and such parties have been
advised by such counsel that either (A) representation of such indemnified
person and the indemnifying person by the same counsel would be inappropriate
under applicable standards of professional conduct or (B) there may be one
or more legal defenses available to the indemnified person that are different
from or additional to those available to the indemnifying person, in which case
the indemnifying person shall not be liable for the fees and expenses of more
than one separate firm of attorneys (in addition to any local counsel) for all
indemnified persons.  No indemnifying
person shall be liable for any settlement entered into without its written
consent, which consent shall not be unreasonably withheld.  No indemnifying person shall, without the
written consent of such indemnified person, effect any settlement of any
pending or threatened proceeding in respect of which such indemnified person is
a party and indemnity has been sought hereunder by such indemnified person,
unless such settlement includes an unconditional release of such indemnified
person from all liability for claims that are the subject matter of such proceeding.


 


(4)   Contribution.  If the indemnification provided for in this Section 3.5(g) from
the indemnifying person is unavailable to an indemnified person hereunder in
respect of any Liabilities referred to herein, then the indemnifying person, in
lieu of indemnifying such indemnified person, shall contribute to the amount
paid or payable by such indemnified person as a result of such Liabilities in
such proportion as is appropriate to reflect the relative fault of the
indemnifying person and indemnified person in connection with the actions which
resulted in such Liabilities, as well as any other relevant equitable
considerations.  The relative fault of
such indemnifying person and indemnified person shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such indemnifying person or indemnified person, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such action.  The amount paid or
payable by a party as a result of the Liabilities referred to above shall be
deemed to include, subject to the limitations set forth in the foregoing
provisions of this Section 3.5(g), any legal or other fees, charges or
expenses reasonably incurred by such party in connection with any investigation
or proceeding; provided, that the total amount to be contributed by such Holder
shall be limited to the net proceeds (after deducting the 


 


20

















 


underwriters’ discounts and commissions)
received by such Holder in the offering. 
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 3.5(g) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in this paragraph.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.


 


ARTICLE
IV


 


TERMINATION


 


4.1   Termination. This Agreement may be
terminated (as between the party electing to terminate it and the counterparty
to which such termination is directed):


 


(a)   by
mutual written agreement of the each such party; or


 


(b)   by
either the Company or a Purchaser, upon written notice to the other party, in
the event that the Closing does not occur on or before July 15, 2008; provided, however, that
the right to terminate this Agreement pursuant to this Section 4.1(b) shall
not be available to any party whose failure to fulfill any obligation under
this Agreement shall have been the cause of, or shall have resulted in, the
failure of the Closing to occur on or prior to such date.


 


4.2   Effects of Termination. In the event
of any termination of this Agreement as provided in Section 4.1, this Agreement
(other than Article V, which shall remain in full force and effect) shall
forthwith become wholly void and of no further force and effect; provided that nothing herein shall relieve any party from
liability for intentional breach of this Agreement.


 


ARTICLE
V


 


MISCELLANEOUS


 


5.1   Survival. Each of the representations
and warranties set forth in this Agreement shall survive the Closing under this
Agreement but only for a period of one year following the Closing Date (or
until final resolution of any claim or action arising from the breach of any
such representation and warranty, if notice of such breach was provided prior
to the first anniversary of the Closing Date) and thereafter shall expire and
have no further force and effect, including in respect of Section 3.4. Except
as otherwise provided herein, all covenants and agreements contained herein,
other than those which by their terms are to be performed in whole or in part
after the Closing Date, shall terminate as of the Closing Date.


 


5.2   Standard.  Notwithstanding anything that may be to the
contrary herein, no representation or warranty of the Company hereunder shall
be deemed to be untrue, inaccurate or incorrect for any purpose of this
Agreement, and the Company shall not be deemed to have 


 


21

















 


breached a representation or
warranty (disregarding all qualifications or limitations set forth in such
representations and warranties as to “materiality”, “Material Adverse Effect”
and words of similar import) for any purpose under this Agreement, including
for purposes of Section 3.4, in any case as a consequence of the existence or
absence of any fact, circumstance or event unless such fact, circumstance or
event, individually or when taken together with all other facts, circumstances
or events inconsistent with any of such representations or warranties, has had
or would reasonably be expected to have a Material Adverse Effect.


 


5.3   Amendment. No amendment or waiver of
any provision of this Agreement will be effective with respect to any party
unless made in writing and signed by an officer of a duly authorized
representative of such party.


 


5.4   Waivers. The conditions to each
party’s obligation to consummate the Closing are for the sole benefit of such
party and may be waived by such party in whole or in part to the extent
permitted by applicable law. No waiver of any party to this Agreement, as the
case may be, will be effective unless it is in a writing signed by a duly
authorized officer of the waiving party that makes express reference to the
provision or provisions subject to such waiver.


 


5.5   Counterparts and Facsimile. For the
convenience of the parties hereto, this Agreement may be executed in any number
of separate counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts will together constitute the same
agreement. Executed signature pages to this Agreement may be delivered by
facsimile and such facsimiles will be deemed as sufficient as if actual
signature pages had been delivered.


 


5.6   Governing Law. This
Agreement will be governed by and construed in accordance with the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State. The parties hereby irrevocably and
unconditionally consent to submit to the exclusive jurisdiction of the state
and federal courts located in the Borough of Manhattan, State of New York for
any actions, suits or proceedings arising out of or relating to this Agreement
and the transactions contemplated hereby.


 


5.7   WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.


 


5.8  Notices. Any notice, request,
instruction or other document to be given hereunder by any party to the other
will be in writing and will be deemed to have been duly given (a) on the date
of delivery if delivered personally or by telecopy or facsimile, upon
confirmation of receipt, (b) on the first business day following the date of
dispatch if delivered by a recognized next-day courier service, or (c) on the
third business day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid. All notices
hereunder shall be delivered as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice.


 


(a)  
If to a Purchaser at the address indicated on such Purchaser’s signature page.


 


22

















 


(b)  
If to the Company:


 


Washington Mutual

Legal Department

1301 Second Avenue, WMC 3501

Seattle, Washington 98101

Attn: Charles Smith

Facsimile: (206) 377-2236


 


with a copy to (which copy alone shall not constitute notice):


 


Simpson Thacher & Bartlett LLP 

425 Lexington Avenue

New York, New York 10017

Attn: Lee Meyerson
          Maripat Alpuche

Telephone: (212) 455-2000

Fax: (212) 455-2502


 


5.9   Entire Agreement, Etc. (a)  This Agreement (including the Exhibits,
Schedules and Disclosure Schedules hereto) constitutes the entire agreement,
and supersedes all other prior agreements, understandings, representations and
warranties, both written and oral, among the parties, with respect to the
subject matter hereof; and (b) this Agreement will not be assignable by
operation of law or otherwise (any attempted assignment in contravention hereof
being null and void). Without limiting the foregoing, none of the rights of any
Purchaser (other than the registration rights set forth in Section 3.5)
hereunder shall be assigned to, or enforceable by, any person to whom a
Purchaser may Transfer Securities.


 


5.10   Other Definitions. Wherever required
by the context of this Agreement, the singular shall include the plural and
vice versa, and the masculine gender shall include the feminine and neuter
genders and vice versa, and references to any agreement, document or instrument
shall be deemed to refer to such agreement, document or instrument as amended,
supplemented or modified from time to time.


 


(a)  
the term “Affiliate”  means, with respect to any person, any
person directly or indirectly controlling, controlled by or under common
control with, such other person. For purposes of this definition, “control”
(including, with correlative meanings, the terms “controlled by”  and “under common
control with”)  when
used with respect to any person, means the possession, directly or indirectly,
of the power to cause the direction of management or policies of such person,
whether through the ownership of voting securities by contract or otherwise;


 


(b)  
the word “or”  is not exclusive;


 


(c)  
the words “including,” “includes,” “included”  and “include”
are deemed to be followed by the words “without limitation”; and


 


23

















 


(d)  
the terms “herein,” “hereof”
and “hereunder”  and other words of similar import refer
to this Agreement as a whole and not to any particular section, paragraph or
subdivision;


 


(e)  
“business day”  means any day except Saturday, Sunday and
any day which shall be a legal holiday or a day on which banking institutions
in the State of New York or in the State of Washington generally are authorized
or required by law or other governmental actions to close;


 


(f)  
“person”  has the meaning given to it in Section 3(a)(9) of
the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the
Exchange Act;


 


(g)  
all article, section, paragraph or clause references not attributed to a
particular document shall be references to such parts of this Agreement, and
all exhibit, annex and schedule references not attributed to a particular
document shall be references to such exhibits, annexes and schedules to this
Agreement.


 


5.11   Captions. The article, section,
paragraph and clause captions herein are for convenience of reference only, do
not constitute part of this Agreement and will not be deemed to limit or
otherwise affect any of the provisions hereof.


 


5.12   Severability. If any provision of
this Agreement or the application thereof to any person or circumstance is
determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions hereof, or the application of such
provision to persons or circumstances other than those as to which it has been
held invalid or unenforceable, will remain in full force and effect and shall
in no way be affected, impaired or invalidated thereby, so long as the economic
or legal substance of the transactions contemplated hereby is not affected in
any manner materially adverse to any party. Upon such determination, the
parties shall negotiate in good faith in an effort to agree upon a suitable and
equitable substitute provision to effect the original intent of the parties.


 


5.13   No Third Party Beneficiaries. Nothing
contained in this Agreement, expressed or implied, is intended to confer upon
any person or entity other than the parties hereto, any benefit right or
remedies, except that the provisions of Section 3.4 shall inure to the benefit
of the persons referred to in that Section.


 


5.14   Time of Essence. Time is of the
essence in the performance of each and every term of this Agreement.


 


5.15   Specific Performance.  The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms.  It is accordingly agreed that the parties
shall be entitled to seek specific performance of the terms hereof, this being
in addition to any other remedies to which they are entitled at law or equity.


 


* * *


 


24

















 


[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]


 


 


IN WITNESS WHEREOF, this
Agreement has been duly executed and delivered by the duly authorized officers
of the parties hereto as of the date first herein above written.


 


	
   

  	
  WASHINGTON MUTUAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


25

















 


[SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]


 


 


Accepted and Agreed as of the date first
above written:


 


	
   

  	
   

  	
   

  
	
   

  	
  Name of Purchaser

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  [PLEASE
  SIGN ABOVE THIS LINE]

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  



 


Aggregate
number of shares of Common Stock to be purchased by you:                  shares


 


Price
per share applicable to the purchase by you of the Common Stock: $8.75


 


Nominee
(name in which the shares of Common Stock are to be registered, if different
than name of Purchaser):                          


 


Taxpayer
Identification Number (if acquired in the name of a Nominee, the taxpayer I.D. No. of
such Nominee):                         


 


26